Legislative Session: Fifth Session, 39th Parliament
This is a DRAFT TRANSCRIPT ONLY of debate in one sitting of the Legislative Assembly of British Columbia. This transcript is subject to corrections, and will be replaced by the final, official Hansard report. Use of this transcript, other than in the legislative precinct, is not protected by parliamentary privilege, and public attribution of any of the debate as transcribed here could entail legal liability.
TUESDAY, FEBRUARY 19, 2013
The House met at 1:36 p.m.
[Mr. Speaker in the chair.]
Introductions by Members
Mr. Speaker: Hon. Members, considering the number of guests we have here today, if everybody was to introduce their guests we'd be here for some time, so on behalf of all the members, I'd like to welcome everybody here for budget day. I'm sure it's going to be an interesting time. Welcome.
We're going to make one exception because the member for Vancouver-Hastings said his life depended on it.
S. Simpson: Thank you, hon. Speaker. I wouldn't say that. There are all these wonderful people here today, and I'm glad that they're all here to visit with us, but I really wanted today to wish my wife a happy birthday. I hope the House would do that, too, because she's in Vancouver and I'm here. Happy birthday, Cate.
Mr. Speaker: I was just checking to see if there were any other wives that are having their birthdays — or any other spouses, I should say, that are having their birthdays.
(Standing Order 25B)
D. Routley: I rise today to celebrate Resident Awareness Day. Residency is a stage of graduate medical training. A resident is a person who has received a medical degree and practises medicine under the supervision of fully licensed physicians. In B.C. there are 1,100 residents in our hospitals and clinics.
Residents are front-line health workers, often the first contact for patients and families seeking care, and are available 24 hours a day. They play a vital teaching role, educating medical students and patients alike through their practical work. A successful residency leads to eligibility for certification of the Royal College of Physicians and Surgeons of Canada or the College of Family Physicians of Canada.
Whereas medical school teaches physicians a broad range of medical knowledge, basic clinical skills and limited experience practising medicine, medical residency gives in-depth training within a specific branch of medicine. Residencies as an opportunity for advanced training in a medical or surgical speciality evolved in the late 19th century from brief and less formal programs for extra training in a special area of interest.
Residencies have long been associated with long hours and minimal breaks. Almost an endurance test, they serve to guarantee the commitment of a student to the practice of medicine. They were almost a hazing in the extreme demands they placed on residents. Thankfully, for residents and patients alike, residencies have evolved. They still place a high burden of performance and dedication on residents, but conditions now serve to optimize training and service quality. Much of that in B.C. has been achieved by the Professional Association of Residents of British Columbia, which began as the Society of Medical Residents and Interns of Vancouver.
In 1969 the Professional Association of Residents of British Columbia began working for improved conditions for residents. In a complex and rapidly evolving modern medical system, residents continue to provide flexible, dedicated and excellent service to British Columbians.
E. Foster: Every year cities and towns across B.C. nominate and recognize individuals for great contributions to their communities. Vernon is no different. This year Vernon's Citizen of the Year is Akbal Mund. Akbal moved to Vernon from New Westminster in 1993 and has been a positive impact on our community ever since.
As one of the founders of Wendy's Dreamlift Day, Akbal and his team from Wendy's have raised over $1 million to send children with life-threatening illnesses and significant disabilities to Disneyland. As president of the 2012 Winter Games in greater Vernon, Akbal assembled and led a team of like-minded individuals to host the most successful B.C. Winter Games ever.
Just a few more of the many organizations that Akbal has been involved with: Vernon Soccer Association, president; Funtastic Sports Society, director; North Okanagan Sports Council, president; and also finding the time to coach youth soccer. Akbal continues to make an impact throughout the community, whether organizing a soccer dance, fundraising for local aspiring athletes or volunteering for a fundraising walk. Akbal is leading by example and offering a willing hand for the betterment of our community.
It would appear that Akbal's main focus is on sport, and he certainly has dedicated a great deal of his time to sport — especially youth sport. But as folks around Vernon will tell you, if there is a fundraiser for a non-profit or a charity, or any other event to help the community, you will find Akbal, his wife, Tania and their two girls, Montana and Kennedy, front and centre giving their support.
I've known Akbal and Tania for several years, and on behalf of everyone in my riding, I want to thank them for all they do for the community. I'd like the House to offer Akbal congratulations on a well-deserved honour.
R. Fleming: As we head into May, all of us here are getting excited about the critical choice facing British Columbians. Will I be going saltwater fishing or freshwater fishing? Fishing season is just around the corner, and hundreds of thousands of anglers from across British Columbia will soon be heading out to their favourite lakes, rivers and coastal fishing spots in their quest to land a big fish.
We often forget about the impact sport fishing has on our economy. According to a recent report by B.C. Stats, the economic contribution of sport fishing in B.C. is valued at $326 million, or half of the GDP produced by all B.C. commercial fisheries, fish processing and aquaculture. Sport fishing sustains 8,400 jobs, or 60 percent of the fishing employment in the province, and $936 million in annual revenues, and it does all this while taking a tiny portion of the annual catch — which measures the saying, as it goes, that that's why they call it fishing and not catching.
It must also be recognized that the small businesses that support and supply anglers are finding new ways to be sustainable and to increase employment in our coastal communities. I want to mention a few examples here today.
Good Hope Cannery and Duncanby Lodge in Rivers Inlet. The operators there are actively encouraging anglers to catch and release trophy-sized Wannock River salmon in an effort to steward this genetically unique salmon run for future generations.
West Coast Resorts fishing lodge, which was purchased last year by the Haida people so that they could increase the Haida's involvement in sport fishing and offer new cultural experiences to anglers.
Langara Fishing Adventures and the West Coast Fishing Club. Over the past 15 years these businesses have collected $1.3 million for local salmon habitat restoration from donations from anglers.
There are many more inspiring examples of businesses and anglers showing leadership in this sector, so as we head into the spring, I know all members of this House will want to wish B.C. anglers good luck and tight lines and appreciate that they continue to make B.C. one of the world's premiere sport fishing locations.
M. McNeil: This week is Heritage Week, with a theme of good neighbours, heritage homes and neighbourhoods. The importance of historic homes and established neighbourhoods to our communities is a theme many people can relate to.
Many families and residents throughout B.C. still live in homes that their grandparents and great-grandparents built, and they have a strong sense of family pride that dates back hundreds of years.
The character and warmth of historic homes and neighbourhoods enhance a community's attractiveness and livability with their vintage styles and wonderful landscapes. They create a positive sense of well-being and enjoyment in communities throughout the province.
B.C.'s historic places help residents and visitors appreciate and understand the province's heritage. They provide a physical connection to our past that current and future generations can enjoy.
B.C.'s register of historic places has over 3,500 listings, and there are thousands more yet to be registered. These places have been identified as important contributors to their communities, giving residents a sense of pride and connection to their local heritage.
Recently, to further ensure that our historic places remain dynamic parts of our communities, government announced the release of Heritage Strategy for B.C., a plan that outlines the province's future goals for heritage conservation — funding to Heritage B.C. to transform its business model to strengthen the organization's ability to deliver heritage planning and training services to local communities, and the appointment of Heritage B.C. as the fund adviser to the heritage legacy fund.
These initiatives go a long way to maintain the presence of heritage buildings and historic sites in our local communities. Heritage Week is about keeping our historic values alive and vibrant in our communities.
YOUTH SKILLS TRAINING INITIATIVE
IN PRINCE RUPERT
G. Coons: Today in northern B.C. too many of our youth must move away from their families and communities to pursue skills training and upgrading. With the many new projects that are proposed in the North Coast constituency and beyond, we must ensure that our youth can take advantage of these opportunities. Thanks to the hard work of many community partners, more youth are now able to do just that.
In Prince Rupert a unique partnership has developed between school district 52, Northwest Community College and Ridley Terminals to offer two new training programs. A millwright foundations program and an industrial electrical foundations program will now be available to senior high school students in the upcoming school year.
The local Northwest Community College will provide instructors, while the school district will contribute classroom space and workshops. The five-year coastal pathways partnership will provide an investment of $350,000 toward delivering skills training specifically targeting the needs of the region, with $150,000 being committed by Ridley Terminals.
High school students will receive early exposure to training and employment opportunities with local industries. Ridley Terminals, through corporate affairs manager Michelle Bryant, will help fund new equipment for these programs and solicit other industry partners for further funding.
This partnership perfectly brings together our two educational institutions with a major industry, allowing our youth the opportunity to develop their skills right at home, alleviating the fallacy for temporary foreign workers. This is where their talents and passion are required. Our youth are needed to build the region, to support the current economic growth and contribute to their community well-being. This is a great example of what we can do when we build local partnerships that create pathways to success for youth in our communities.
WILLIAMS LAKE FUNDRAISING RUN FOR
B.C. CHILDREN'S HOSPITAL
D. Barnett: On June 30, 2012, I met the most amazing and inspiring group of young people and their parents: Kids Running for Kids, a group of 70 Williams Lake kids running to raise money from Williams Lake to B.C. Children's Hospital. Some of the kids' families have used the B.C. Children's Hospital.
Isabelle was born 14 weeks premature. Logan was born with a cleft palate and a foot deformity. Marcus required tubes to improve his hearing. Some of these marvellous kids live with chronic conditions or are aware of others who require regular visits to B.C. Children's Hospital. They are grateful for this great facility and decided they wanted to help other kids.
With the help and guidance of their families and the organizational skills of Rya Enns, this group raised approximately $100,000 through raffles, dinners, dances, garage sales, donations from friends and community, and other fundraising activities.
Kids Running for Kids travelled from Williams Lake to B.C. Children's Hospital, leaving June 30 and arriving July 7 at the B.C. Children's Hospital. They travelled through communities in British Columbia who welcomed them with barbecues and hospitality. Upon arrival July 7 at the B.C. Children's Hospital, this great group was welcomed by the wonderful staff of B.C. Children's Hospital and the Hon. Moira Stilwell. These young people have made us in the Cariboo proud, and I know, with inspirations like this, the future of our province will be in good hands.
Mr. Speaker: I'll remind members, you can't use members' names in the House.
ELECTRICITY RATES AND
B.C. HYDRO MANAGEMENT
J. Horgan: So $59 billion in contractual obligations to independent power producers, $14 billion in debt, $4 billion in deferral accounts and 5,200 gigawatt hours of energy we don't need in the coming fiscal year. Yesterday the Energy Minister thought that this was all a waste of time and felt that we should go back to the 1960s. He went right by the 1990s. I'm sure that shocked the daylights out of the Jobs Minister. He went straight back five decades.
In light of the people that have assembled with us today — the business community and others from around British Columbia — perhaps the minister will stand up and focus on 2013. He'll focus on today and give the opposition and the people of B.C. an answer to how you propose to deal with the absolute disaster that is B.C. Hydro on the Liberal watch.
Hon. R. Coleman: All I did yesterday was remind the member that the NDP in 1962 actually believed the two-river policy was a political hoax because we'd never need electricity in B.C. to ever use the power from the dams. It's an inconvenient fact for the member opposite.
It's also an inconvenient fact for the member opposite that he doesn't want to actually recognize that power prices can move up and down depending on activity in the marketplace and also relative to where the U.S. economy will be in a year from now, two years from now, five years from now.
It's also an inconvenient fact that he doesn't, evidently, like wind power, doesn't like bioenergy, which could actually offset diesel in small communities, where they're paying way more for diesel power, and actually clean up the environment.
Actually, back in the 1960s — the reason I said it for the member opposite yesterday was…. In actual fact, if you look over the long period of time of power, I believe, at the end of the day, the IPP power contracts we have in place will pay for themselves.
Mr. Speaker: The member has a supplemental.
J. Horgan: If we could harness the wind that just came out of the minister for a cheap price, we might be a bit further ahead.
Mr. Speaker: Members.
J. Horgan: For the record, I was three years old in 1962. I wasn't concerned about energy policy at that time. But I wish…. Certainly, members on this side of the House and British Columbians from every corner of this province want to know what the minister's going to do today, in 2013.
What are you going to do today, Minister, about 5,200 gigawatt hours of power that we paid four times the market rate for? What are you going to do about the deferral accounts? What are you going to do about the unfunded liabilities?
Yesterday I asked the minister about forecasts, and he said the following: "First of all, they've got a crystal ball, and they can predict hydro rates going forward into the future."
Well, guess who else has a crystal ball? The people at B.C. Hydro. Every year for the past ten years in their service plan they've been projecting out rate increases that they're going to have to have to meet the obligations that you have put upon them. For example, in last year's service plan, 17.4 percent rate increases over the next three years.
Is that the minister's solution — putting more on the backs of British Columbians to pay for your folly at B.C. Hydro?
Hon. R. Coleman: When anybody opens a question with an insult, it usually means they don't have a lot to bring to the debate. The fact of the matter is that in 2005-2006 the power prices in North America were spiking off the track. Matter of fact, the spot market went up to as much as $750 a megawatt hour.
Today the member actually stated…. Well, every comment he ever makes is in and around the issue on what the spot market might be today. But where's the market going to be two, three, four or five years from now?
We also have the ability to manage power because we have this great asset — which the NDP opposed in 1962 — called the two-river strategy, with the dams, that actually allows us to trade power and manage it on behalf of British Columbians. We do that in order…. At the same time, this year alone we'll make $200 million with Powerex, trading in power, in spite of the fact that we do have some IPP power that today may be a little high for the market but in the future will be worth the money.
Mr. Speaker: The member has a further supplemental.
J. Horgan: I'm not sure at what point in the past decade energy prices spiked to $700 a megawatt hour. I anxiously await the documentation to back up the hyperbole from the minister on the other side.
What I know is what B.C. Hydro puts in their forecasts. What I know is what the Minister of Finance puts in his material assumptions going forward. At no time in the past five years has the price of energy gone above $50 a megawatt hour. Despite that, B.C. Hydro has been directed — directed — to purchase power at above $125 a megawatt hour going forward 20, 30, 40 years, and in one instance, a 60-year contract.
As much as the minister would like to go back to the 1960s — a kinder, gentler time for him, perhaps — let's focus on today. If you generate electricity, you have to move it. We have 5,200 gigawatt hours more than we need, we are trying to sell it into a market that's at about 35 bucks, and we paid $125. How does that make sense to anyone in British Columbia, beyond the Minister of Energy?
Hon. R. Coleman: Let's do a little trip down memory lane for the behalf of the opposition. First of all, you voted against the carbon tax because you don't like things that are good for the environment. Then you voted against the cap-and-trade and its enabling legislation. Then you called for a moratorium on clean, independent power, which includes wind power, bioenergy power, opportunities for First Nations and jobs and investment in their communities. One minute you're for Site C; the next minute you're jumping off the fence and back to Site C.
On top of that, even yesterday afternoon the members of this House actually stood up and unanimously voted for a change in park boundaries. You know why, Mr. Speaker? In that park boundary amendment was a change so that we can actually fix the John Hart dam in Campbell River — a $1.2 billion investment that should have been made decades ago. It was never made by the NDP, and we're making it.
JUMBO GLACIER RESORT MUNICIPALITY
M. Mungall: After 20 years of consistent local opposition to Jumbo Glacier resort, this government has ignored all democratic principles, created a municipality and appointed a mayor and council without a single resident. Its sole purpose: forcing a mega-resort on the region.
Both the UBCM and the Association of Kootenay and Boundary Local Governments opposed this fantasy town, and yesterday the West Kootenay EcoSociety filed a judicial review on the constitutionality of this municipality. This is now the second judicial review filed against the Liberal government's underhanded way of forcing this resort on Kootenay residents.
Will the minister admit that he has utterly failed in hearing the will of Kootenay residents and ignored democratic principles?
Hon. B. Bennett: I need to correct the member, with all due respect. The regional district of East Kootenay — that's the local government that is responsible for this area — actually passed a resolution asking the province to create a mountain resort municipality.
Creating a municipal structure for a large project like this is not unique in British Columbia. There is a history. Tumbler Ridge was created that way. There was actually a mayor appointed for Tumbler Ridge long before there were residents there. There are at least a dozen communities in our history that have been created around either mines or hydroelectric developments, all for the same reason: to create jobs, to add to the province's economic viability and to help the regions in which these projects take place.
I think it's interesting, hon. Speaker. This is a perfect way to characterize the opposition compared to this side of the House. We actually believe in socially responsible, environmentally responsible economic development, and they don't.
Mr. Speaker: Members. Members.
The member has a supplemental.
M. Mungall: Jumbo's unelected council is not having its meeting in Jumbo today. You can't blame the roads not being plowed, because there are no roads. There is no electricity, no buildings, no garbage pickup, no phones, no chairs. There is no "there" there. There are more people living on Gilligan's Island than there are in Jumbo.
M. Mungall: Looks like they want to go for a three-hour tour.
Mr. Speaker: Members.
M. Mungall: Not only are they not meeting in Jumbo; they're not meeting in Invermere, the closest community to this imaginary town, because that community is adamantly opposed to this mega-resort. Will the minister just admit that his peculiar obsession with Jumbo Glacier resort flies in the face of democracy?
Hon. B. Bennett: Hon. Speaker, it's true. I do have an obsession. My obsession for the last 12 years has been to work my tail off to make sure that the people in my region of East Kootenay have a better life, that they have more opportunities. That's my obsession, and I'm not going to apologize for it. I'm really curious now to know what the Gilligan's Island mode of economic development is all about, so maybe the member will be able to explain that later.
This project has been in the pipeline for 22 years. It's gone through the Social Credit government and been encouraged. It's gone through an NDP government and been encouraged by two Premiers, and it's gone through 12 years of B.C. Liberal government and finally got its environmental certificate, got its master development agreement and got final approval.
This is going to mean hundreds of jobs for the Columbia Valley and $450 million in development.
N. Macdonald: The first meeting of the appointed council of the Jumbo municipality was greeted with a demonstration against a land giveaway that has absolutely no evidence of local support and no democratic basis. The minister talks about a massive investment but neglects to mention that there is actually no investor. There is no investor. The money the minister is spending is public money. The land that is being given away is public land, and the benefits are entirely to be enjoyed by a small group of B.C. Liberal insiders and donors.
N. Macdonald: That's the truth.
How can the minister possibly justify this waste of taxpayer dollars and this giveaway to B.C. Liberal insiders?
Hon. B. Bennett: I've been waiting for a long time to ask the member: what does he have against jobs for his constituents? I don't get it. The Columbia Valley has struggled for the last number of years, and this is an opportunity to develop an iconic all-season resort. There will be nothing like this in North America. There is nothing like this in North America.
Five glaciers. When you go up the gondola to the top of Jumbo Mountain and look down into Lake of the Hanging Glacier…. I guarantee you, hon. Speaker, that people are going to come from around the world. This is going to help lay a foundation for the growth of our tourism industry here in British Columbia. It's going to create jobs in that member's riding, and he opposes it.
Mr. Speaker: The member has a supplemental.
N. Macdonald: There is not one building in that municipality. There is not one paved road. There is not….
Mr. Speaker: Members.
N. Macdonald: There is not one human resident….
Mr. Speaker: Member, take your seat for a second, please.
N. Macdonald: There is not one building in that municipality. There is not one paved road. There is not one human resident, and that is not likely to change at any time because there is no investor.
What we see is that the B.C. Liberals have handed over control of 6,000 hectares of public land to a small group of B.C. Liberals and insiders. They are the only ones that will possibly benefit from this. Local residents in the Ktunaxa are absolutely clear that they are opposed to this land giveaway. With no investors other than the taxpayers of B.C., what is the government doing proceeding with this waste of taxpayers' money?
Hon. B. Bennett: Well, two things. First of all, there are two First Nations in the area. One is opposed, and I've always been very respectful of that fact and continue to have a very positive relationship with the Ktunaxa. The other First Nation is the Shuswap band, and they are vociferously in favour of this project. In fact, I've already signed an economic benefits agreement with the proponent, and they want to get on with it.
What really is troubling is that the project has actually gone through every single stage that any project in the province can possibly go through. It went through those stages through three different government administrations: the Social Credit, the NDP and the B.C. Liberals. They earned an environmental certificate, which has 200 conditions on it. That's how tough it was for them to earn an environmental certificate — 200 conditions that the proponent will have to meet in building this resort.
After 22 years of this process this member wants government to just say: "Oh jeez, sorry. We changed our mind." No — after 22 years. If they're elected, that's what they'd do. That's what they did in the 1990s, and that's what they will do again.
PAVCO RESPONSE TO
INFORMATION REQUESTS FROM MEDIA
D. Routley: The Premier has made claims to open government being one of her top three priorities, even telling the media that information belongs to the public. Yet on Friday we learned that investigative journalist Bob Mackin received a letter from PavCo telling him they have applied under the Freedom of Information Act to bar him from "frivolous and vexatious" claims to information. Does the Premier agree with this outrageous act by PavCo to silence one of its chief critics?
Hon. R. Coleman: The individual that the member refers to has been making and has received some information with regards to information and privacy from PavCo. But the members opposite and the members of this House should know that he is 89 percent of all the requests of information and privacy at PavCo. It's a large volume of work, so they were finally to the point where some of it became ridiculously frivolous in their minds. They asked and they have gone forward to ask the commissioner for an opinion.
Mr. Speaker: The member has a supplemental.
D. Routley: It's about the public interest, an uncomfortable fact for the government. It was through these claims to freedom of information that the public found out about PavCo's hundreds of millions of dollars of overspending. It was only through these requests that the public knew this.
Does the minister responsible for PavCo stand by the position that asking about massive cost overruns is frivolous or vexatious?
Hon. R. Coleman: Through to the member opposite: first of all, Member, the first thing you'd like to do yourselves is try and get your numbers straight when you're actually making public comments. I've heard your members talk about the $100 million figure quoted for the roof for B.C. Place under PavCo's chair back in 2008. The member doesn't actually want to tell the rest of the story, which was about a pillow roof to replace exactly the same roof as was there before — not a significant investment to actually redo the entire stadium, which this was.
PavCo announced the final approved budget of $563 million for B.C. Place revitalization in October 2009. They did it for $514 million, well under budget, hon. Member. And on top of that….
Hon. R. Coleman: I know you don't like these convenient facts. Your way of going about this, hon. Members…. You would have torn it down. You would have spent over a billion dollars to build a new stadium rather than spending $514 million for the jobs, opportunities and economic growth that it brings with a world-class stadium. It is now one of the top three stadiums in all of North America for about a third of the cost.
S. Chandra Herbert: This is about freedom of information. This is about giving journalists access to information they need to do their jobs. I know the minister wants to focus on sports stadiums, but we're talking about work that the media needs done so that they can support our democracy.
Under the Liberals, PavCo has had a history of mismanagement: five times over budget, the Telus naming debacle, PavCo's floatplane fiasco, PavCo's botched casino deal, the convention centre going massively over budget. The list goes on and on.
The Premier claimed that open government was one of her top priorities. Will she stand today and demonstrate that she actually puts action behind her words and tell PavCo to stop trying to ban the media from doing their job?
Hon. R. Coleman: You know, no sooner do I draw the parallel that members opposite, not having the facts and putting them out there…. The member opposite gets up and says the wrong fact. He says it's five times over budget. It's not. That was about a different roof and a different time.
Frankly, if you asked anybody about what you should do with B.C. Place, including your constituents, they would tell you that you should modernize it, that you should do something about it, and please don't put the same kind of roof on it because it's too tough to get displays in and out. It actually loses days of rent because of the fact you can't move things in and out, the way it was before. You wouldn't have had the Whitecaps, hon. Member, in that stadium at all if you hadn't done what you did to the roof.
So what we did is actually looked at a stadium and said: "Here are the options." One, we just put a roof on it — spend $100 million and still have the unperforming building we had in the past. Two, we could tear it down, remediate the soil underneath it, spend a few hundred million dollars on that and probably spend a billion-something to build a new building.
Or you could modernize the building, invest the money for $514 million, well under the budget for the building, and come out with a world-class stadium that ranks up in the top two in North America — one of them being Dallas Stadium, where it is worth somewhere around $1.5 billion — and get it for $514 million.
Mr. Speaker: The member has a supplemental.
S. Chandra Herbert: Once again, the minister dodges the question. Once again, the Premier declines to stand up for open government. Last November the Premier appointed Peter Fassbender chair of PavCo. Recently she appointed Peter Fassbender candidate for the Liberal Party. Now PavCo…. [Applause.]
S. Chandra Herbert: Oh yes, that's right. Bring it on.
And now, hon. Speaker, the entire Liberal caucus applauds for a man who chairs an organization that's trying to ban the media from doing their job.
Will the Premier stand in this House and tell her PavCo chair, tell her recently appointed candidate, to stop trying to ban investigative journalists from doing their job? Will she stand?
Hon. R. Coleman: In section 43 of the act, the independent officer of the Legislature can be asked to give an opinion with regard to FOI requests in consideration of the limitation of volume and what is being asked for. Eighty-nine percent of all the requests at PavCo coming from one source?
Well, let me say this to you, hon. Member. I will not stand in this House and let you impugn the reputation of a friend of mine who I think has given a ton to public life in this province and is a great chair of PavCo.
Mr. Speaker: Members.
ENVIRONMENTAL REVIEW OF
ENBRIDGE OIL PIPELINE PROPOSAL
R. Fleming: Three years ago this government signed a deal that outsourced final decision-making power to Ottawa over the Enbridge northern gateway. With firm public opposition and a looming election, the B.C. Liberals are suddenly aware of the gaping holes in our coastal oil spill regime and are trying to get out in front of something that they're well behind. The stakes are incredibly high for British Columbia, but this government has made our province a bystander in all of this.
My question is to the Minister of Environment. Will he serve notice? Will he opt out of the equivalency agreement and commit to having a made-in-British-Columbia environmental review so that our province can finally make its own determination on whether the Enbridge northern gateway is good for the province or bad for the province and unacceptable?
Hon. T. Lake: While I was in Prince Rupert for a day and a half at the northern gateway hearings, representing and meeting with our team that was representing the people of British Columbia so well at those hearings, the member opposite was there for about one hour — an hour.
It's interesting that the NDP's position on northern gateway is no — without any process whatsoever. But interestingly enough, a very similar proposal from Kinder Morgan…. Well, they're not quite sure about that. They're not quite sure. The position of the NDP is absolutely inconsistent, although what we have heard so far is that they will decide before any process what's in and what's out in the province of British Columbia. That is going to chase investors to anywhere else but this province if that NDP party were to be in government in the province.
FLOOD PROTECTION IN
SWANSEA POINT AREA
K. Corrigan: Last year the community of Swansea Point, near Sicamous, was devastated by a water-and-debris flow in Hummingbird Creek. There was millions of dollars of damage, and the creek is now full of debris. The residents have pleaded over and over again with the government for help. But it has failed to take meaningful action.
I visited Swansea Point this month and saw the extensive damage and met with people who are literally afraid for their lives. I know the minister is going to stand up and talk about a very recent change of heart that seems to coincide with media scrutiny and community anger about this. They're going to send in a digger.
But the government's own briefing notes indicate that band-aid remedial work is completely inadequate. It reads:
"This work is modest in scope compared to the more extensive work that previous studies have prescribed in order to minimize the flood risk on Hummingbird Creek" — reports that recommend measures like replacing the culvert or building a bridge. The province has done nothing substantive, and the people are afraid that the coming thaw is going to again result in devastation to their community.
This is a case of way too little, way too late. To the minister: why has the government refused to do the work that needs to be done in order to protect the property and ensure the safety of the people of Swansea Point?
Hon. M. Polak: I myself have also visited the area — only recently, just a couple of weeks ago. No question that there was tremendous devastation for that community and for the homeowners and business owners in the area. But the member, quite frankly, is wrong.
Right now we are underway with a project that will be completed before the spring freshet. In fact, we're always willing to work with communities to see if there is more we can do.
In 2004, recognizing that there was potential for debris collection, we offered $4 million to build a bridge, a debris trap — all the types of things that the member is pointing out with respect to the studies. But as a result of a referendum in the community, the levy was not approved. We are still working with the community, and we will do whatever we can to ensure that that community is safe from further debris collection and the kind of calamity that resulted.
[End of question period.]
Point of Privilege
(Reservation of Right)
Hon. T. Lake: Mr. Speaker, I'd like to reserve my right to raise a point of privilege over comments made yesterday by the member for Surrey-Whalley during my remarks on Bill 5.
Mr. Speaker: The member reserves his right.
Orders of the Day
Hon. M. de Jong: Mr. Speaker, I move that this House at its next sitting resolve itself for this session into a committee to consider the supply to be granted to Her Majesty.
Presentation of Estimates
ESTIMATES OF SUMS REQUIRED
FOR THE SERVICE OF THE PROVINCE
Hon. M. de Jong presented a message from Her Honour the Lieutenant-Governor: Estimates of Sums Required for the Service of the Province for the fiscal year ending March 31, 2014, and a supplement to the estimates for the fiscal year ending March 31, 2014, recommending the same to the Legislative Assembly.
Hon. M. de Jong moved that the said message and the estimates accompanying the same be referred to the Committee of Supply.
Hon. M. de Jong: I move, seconded by the hon. Premier of British Columbia, that the Speaker do now leave the chair for the House to go into Committee of Supply.
Hon. M. de Jong: For almost a century and a half this Legislative Assembly has served British Columbians by performing two functions fundamental to our parliamentary democracy. First is the passage of laws by which we seek to establish a civil society based upon the rule of law, where all citizens may expect to be treated equitably and justly no matter who they are. Secondly, members of this Legislative Assembly, through debate and discussion, authorize the executive branch, on behalf of the Crown, to collect and spend the public's money. We call it the budget.
Today begins the budget or, as we now refer to it, a three-year fiscal planning process made more interesting, admittedly, by virtue of the fact that before the full budget process is complete, British Columbians will have a direct opportunity to express their views in that great democratic shareholders meeting scheduled for May.
Building the plan hasn't been easy. We have worked for many months to find the right balance of measures to support our economic recovery, to maintain support for the services people rely on every day, to respect the basic principle that government should not spend more of the taxpayers' money than it receives from the taxpayers.
Getting things right has meant a lot of tough decisions, but this is not the time to turn our backs on the discipline that has helped us through the worst of the economic downturn. Let's not forget the global recession that began in '08-09 with probably the biggest economic and financial shock — I hope the biggest financial shock — we'll see in our lifetimes, and jurisdictions everywhere are struggling to recover.
The U.S. peers nervously across the chasm of a fiscal cliff. Much of Europe languishes in recession. Even China, with its fast-growing middle class, saw its economic growth in 2012 decline to its lowest level since the turn of the millennium. Economists use words like "weak," "muddled" and "anemic" to describe the international recovery.
We're not immune in B.C. We sell our goods on the global market. We can't control international prices. That leaves us vulnerable on the revenue side of the ledger and demands extreme caution as we plan our budgets for the year ahead.
When prices for resources such as coal and natural gas are down, as they are at the moment, our provincial treasury takes a hit. But that doesn't mean that we as a government are going to renege on our longstanding commitment to sound fiscal management. On the contrary, in an environment of ongoing global volatility, an environment of continuing uncertainty, we are more determined than ever to hold the line on government spending and to honour our commitment to the people of British Columbia that we will not spend more of their money than government receives.
To be sure, we could take a different approach. We do actually have the option of continuing to operate in a deficit position for years to come, which is precisely what a lot of other governments are doing. If we chose to, we could even roll out big, new spending programs. That's not uncommon in election years. And there's always pressure on government from many fronts to increase spending in a long list of areas, to try and please as many of the voters as possible.
I'll tell you right now: we're not going to do that. Why? Well, I guess, lots of reasons why. But as my parents used to tell me with that measure of common sense derived from their agrarian roots: "Because, Son, we can't afford it right now."
Increasing spending across the board in excess of the money taxpayers can send to government today is plainly and simply the wrong choice not just today but for the future of our province and for those generations yet to come. We will not spend money that we don't have. We will not leave a legacy of needless debt. To do so would be, frankly, irresponsible. Anyone looking for that approach in what is to follow is going to be disappointed.
Starting today, British Columbians will once again be able to look at their children and grandchildren and know that the services we rely upon today are being paid for us today. Today I am presenting what we promised to the people of British Columbia and what they have worked hard to achieve: a balanced budget. In fact, we'll have a modest surplus.
That doesn't mean, though, that everything from here on out is going to be easy, but it does provide the firm footing and the opportunity that we need to continue investing in core programs and services. With this budget we are moving forward to increase revenues by growing our economy and creating jobs, to keep spending affordable and to work in partnership with families for the most important investment of all — investing in the future of our children.
I say plainly that I recognize that given the timing of this particular budget, there will be some skepticism — certainly amongst members opposite and perhaps members of the public — about whether this is in fact a balanced budget. So let's confront that question head-on. Is the budget really balanced?
The answer lies in the analysis of two parts of the budget — the revenue side and the expenditure side. Both must be credible; both must withstand scrutiny. I believe they are, and I believe they will.
Over the term of our three-year fiscal plan, revenues are projected to grow by an average of 3 percent. Spending is projected to grow at roughly half that rate by an average of 1.5 percent per year. As difficult as it is not to spend all of the modest additional revenues we anticipate receiving, that is the only formula, the only approach, by which a deficit can be eliminated on a sustainable basis.
The end result, factoring in all of the other pieces of the budget, will be surpluses of $197 million in '13-14, $211 million the following year and $460 million in the third year. That is the bottom line, our fiscal plan at its highest level.
Now I'll turn to how we'd like to achieve it, starting with our work on the revenue side. At this time last year the government had forecast a deficit of just under $1 billion for 2012-13. The fact is, as members know, that with declining revenues, the forecast for the deficit went up at one point as high as $1.5 billion. Today, in the third quarter report, the deficit for '12-13 is estimated to be $1.2 billion. That's a big gap to fill, and as I've said, it won't be easy. But with the plan I'm presenting today, taking the final step towards eliminating the deficit is achievable.
We expect gradual improvements in commodity prices and markets for some of our key exports over the next few years, including lumber and electricity. That will contribute to modest economic growth of 1.6 percent in 2013, 2.2 percent the following year and projected 2.5 percent in 2015. These numbers are lower than the outlook provided by the B.C. Economic Forecast Council. Its 14 members, including some of the most respected independent economists in Canada, meet with government every year before the budget to give us their best advice.
This year, for the first time, the council meeting was open to the media. They shared their advice and analysis, essentially in public, ensuring transparency in that part of the process. Happily, even some members of the opposition were present.
Along with a more conservative forecast for economic growth, we have built two additional layers of prudence into the budget. First, we've included a forecast allowance of $200 million in '13-14, $225 million in the following year and $325 million in the third year to guard against revenue volatility. Secondly, the fiscal plan includes contingencies of $225 million each year to help manage unexpected pressures and fund priority initiatives that may arise.
To further underscore our commitment to transparency, we engaged Dr. Tim O'Neill, a respected independent economist, to review, evaluate and report on all of the Ministry of Finance's economic and revenue projections. He's now completed his work. As members know, he released a report to the public yesterday. In that report he confirmed that our processes, methodologies, assumptions and forecasts are legitimate to the extent that projections about the future can be legitimate.
Here's what he said: "The general observation to be made about the assumptions that underpin the revenue forecasts is that they incorporate, for the most part, a reasonable amount of prudence, especially given the degree of uncertainty that still surrounds the economic outlook not only for B.C. but for North America and Europe and indeed the global economy."
Dr. O'Neill had a concern. Given the volatility around natural gas pricing, he has suggested that instead of accepting the average of 24 private sector forecasts, he's recommended that we plan on the basis of the lower-end forecasts and assume prices for natural gas in the $1.80-to-$1.90 range. That's what we've done.
So we're confident that revenues will grow modestly. We're projecting growth of 4.6 percent in '13-14, 1.3 percent the following year and 3.1 percent in '15-16. But that alone is not and will not be enough to meet our balanced-budget targets. Therefore, we're asking business to help, consistent with a plan we put forward a year ago.
In Budget 2012 the government signalled that one of the options being considered to achieve a balanced budget was to increase the general corporation income tax rate by 1 percentage point. Today I can confirm that will happen. In fact, it will happen earlier than planned. The rate will rise to 11 percent effective April 1, 2013.
The small business corporate income tax rate will remain unchanged, and because we've worked so hard for so long to keep taxes low, B.C. is still very competitive. Even with the change taking place in April, the general corporate income tax rate will still be 33 percent lower than it was in 2001. It will also remain amongst the lowest in the country.
We'll also see a revenue improvement from adjustments to the industrial property school-tax credit, which was introduced in response to the recession to help employers sustain their operations.
For major industries, including sawmills, pulp mills and mines, the credit will remain unchanged, but we are beginning to scale it back for the light industry class. The value of the credit for those properties will decline from 60 percent to 30 percent in 2013 and fall to zero in 2014.
The final change on the business side involves natural gas wells that qualify for the deep-well royalty credit program. We're adjusting the royalty structure and introducing a minimum amount so that revenues flow into provincial coffers sooner. Total revenues expected from these measures over the three-year life of the fiscal plan equal about $900 million.
Those extra dollars from business and industry will go a long way towards meeting our targets, but with this budget we are also asking those individuals who have a little more to contribute a little more. Starting in January 2013 we will enact a temporary two-year increase in the personal income tax rate on income above $150,000 a year. The rate will increase by 2.1 percent to 16.8 percent, from 14.7 percent, for 2014 and 2015 only. Even with this increase, B.C.'s top marginal tax rate will still be very competitive.
Secondly, to help sustain our health care system, MSP premiums will increase by about 4 percent effective January 1, 2014, and we are increasing taxes on tobacco by $2 a carton effective October 1. But here's the offer. Smokers who object to paying more have time to quit, and according to the surveys, seven out of ten smokers want to quit.
We've already got the lowest smoking rates in Canada — below 15 percent. But smokers, if they choose, can join over 100,000 people and sign up for B.C.'s smoking cessation program, which is designed to help people achieve their objective of quitting. If only half those people manage to stay tobacco-free, the payoff for their health, the health of their families and the health care system itself is well worth the investment.
With these tax changes, B.C. will be another step closer to balancing the budget. We will close the rest of the gap with proceeds from the sale of surplus assets, consistent with the plan we announced in Budget 2012.
There are about 100 surplus properties and assets, and we're continuing a process to turn them into economic generators, providing amenities such as housing, health care and long-term residential care on what are now, for the most part, vacant or underutilized lands.
We have sales agreements in process or negotiation underway on 16 properties, including a vacant lot near the Victoria General Hospital, a large surplus parcel on Tranquille Road in Kamloops, a former school board office in Surrey, a surplus parcel near the Mission Memorial Hospital, a former health care facility in Vancouver's Grandview-Woodlands neighbourhood and a vacant property in Surrey originally purchased for a hospital expansion that has now taken place at Surrey Memorial.
Based on 2013 assessments and market appraisals, those 16 properties will provide an estimated return of $260 million. A further 65 properties are being prepared for market. In total, we expect the sale of surplus assets will deliver a net gain over the first two years of the fiscal plan of approximately $625 million.
With tax changes, economic growth and surplus asset sales, annual revenues will grow to $46.4 billion by the final year of the fiscal plan. That is the story on the revenue side.
Now let's turn to the other side of the equation, the spending side. The watchword here is discipline as we pursue the appropriate balance between providing public services and keeping those services affordable.
Between 2005 and 2008, when the global and provincial economies were strong, government spending was growing by approximately 6 percent year. After the worldwide recession hit, we had to scale that back because we all know what happens when you spend more money than you make. That's why we've worked so hard, especially since the recession, to keep provincial spending in check.
Public sector unions have played a role, and I want to take the opportunity to publicly acknowledge the hard work, good faith and creativity of all the parties involved in public sector bargaining. The vast majority of unions in the 2010 round of contract talks accepted two-year agreements with net zero wage increases.
Now, had we ignored the economic reality and agreed to modest annual raises of even 2 percent under the 2010 net zero mandate without offsetting wages, we could be facing more than $4.3 billion in additional debt by 2016. In the coming year alone we would have needed to find another $790 million more to support those wage increases. Quite frankly, I don't see how there would have been any way that we'd be talking about a balanced budget today.
Under the current 2012 cooperative gains mandate, we have reached agreements with about two-thirds of the public sector workers. Many are receiving modest wage hikes, but these are funded entirely by savings from efficiencies, with no new taxpayer dollars.
Along with continuing discipline on wages, we've frozen salaries for all senior managers. We're aggressively auditing commercial Crowns, and we continue to cut discretionary spending in areas such as travel and administration. In 2012 those measures resulted in savings of $20 million from ministries. From 2013 onward we expect ministry savings of $15 million and a further $20 million in savings from Crown corporations.
With those efficiencies and by banking that money, we can afford to maintain core services. We will continue to see modest increases in a few important areas, including health care and education, the two most important public services British Columbians rely upon. Health care has historically accounted for the largest share of the budget, and I don't think that's likely to change anytime soon.
I'd like to take a moment and look at where we are and how we're doing as a province in the measures that matter most. We have the longest life expectancy in Canada. If we were a country, we'd be second only to Japan in terms of life expectancy. We have the best survival rate for heart disease in Canada, the lowest incidence of cancer and, among those who do get cancer, the very best survival rates.
We have amongst the healthiest people and the best health care anywhere in the world, but it comes at a cost, and that cost is increasing. It has not recently in B.C. and will not rise at the rate we are seeing in other jurisdictions, but we will be spending more.
Over the three-year term of the fiscal plan the Ministry of Health will receive a total of $2.4 billion in additional spending. That's a lot of money. But to put it in perspective, the average annual increase in health spending is projected to be 2.6 percent, significantly lower than the 6 to 8 percent growth we saw before the recession.
We're slowing the rate of spending growth by continuing to drive improvements and seek out efficiencies in health care delivery. For example, in the past year alone we've introduced a new screening program for colorectal cancer that people can complete at home without costly hospital visits or equipment. We've given nurse practitioners a wider scope of practice so that hospital patients can be admitted and discharged a lot more efficiently. We've announced a new regulation to reduce the price of generic drugs, saving families and the government significant amounts of money.
These are just a few examples of how we're trying to make dollars go further. Admittedly, this is in stark contrast to those who simply advocate elevating British Columbia to the highest per-capita health spending in the country. Today, despite resisting the call from some quarters to be the biggest spenders in the country, and thanks to innovation and hard work from dedicated professionals, our key health outcomes — the most important measures — rank amongst the highest in the world.
British Columbians also enjoy one of the world's best public education systems. Through our new education plan, we're working to ensure that students are prepared to achieve and succeed in our rapidly changing world. To support that continuing transformation, we're investing $210 million over three years to support the learning improvement fund.
Since its inception one year ago the fund has provided extra support to virtually every public school in the province, with approximately 500 more teachers hired at a cost of $37 million; $17.3 million devoted to special education, increasing hours of work for more than 7,400 existing assistants and placing more than 400 new teacher assistants in schools; and $1.8 million devoted to professional development. We'll contribute $60 million to the fund in the coming year, increasing to $75 million in each of the two following years. We look forward to seeing those dollars translate into better outcomes for students.
We are also investing $1 million to help ensure that students have access to the healthy foods they need for optimal growth and development. We have supported the school fruit and vegetable nutrition program since its inception as a pilot project in 2005. It now provides fresh produce to hundreds of thousands of students in 1,400 schools, helping students get a taste for healthy eating while connecting them to the B.C. farms that put food on our tables. Now, with additional funding, we're expanding the program through a new partnership with the B.C. Dairy Association, providing local milk to schools around the province.
Along with higher funding for health and education, we're providing over the next three years $60 million to continue the 2010 sports and arts legacy program, which provides more opportunities for youth participation; $52 million to maintain front-line RCMP services, including officers hired to combat organized crime and gang activity; $18 million for the recently announced creative futures initiative, to help increase youth participation in the arts; $13 million to support the renewal of single-room-occupancy hotels, providing a better quality of life for some of our most disadvantaged citizens; and $5 million to enhance problem gambling treatment, counselling and prevention services.
While it's not an exhaustive list, I expect that some sectors — like the film industry, who were looking for specific initiatives — will feel overlooked. In recognizing the challenges that they and others face, I want to emphasize that our ability to do more in the future is enhanced significantly with a robust, growing economy and a balanced fiscal plan. We look forward to working with them in the future.
In addition, we will continue making targeted investments to support economic growth through a number of initiatives, including the B.C. jobs plan. As members know, the plan is a long-term initiative to make the most of B.C.'s strategic advantages, and one key pillar is to open and expand new markets for our products. Some people still believe that we can wall ourselves off from the world, that we can somehow survive in an insulated B.C.-only scenario. It's just not true.
Market diversification is absolutely essential to maintaining, let alone improving, our standard of living. In 2001, 70 percent of our exports went to one market: the U.S. We were vulnerable. Any suggestion that we could reduce our trade dependency on the U.S. was met with great skepticism, but we've done it. Trade to the U.S. now accounts for 45 percent of our exports — important, to be sure. But Asia now purchases 41 percent of our exported goods. Exports to China were up nearly 20 percent in 2012, and while the share of B.C. exports going to India is small today, it has increased by nearly 60 percent last year alone.
We are succeeding in diversifying our markets. We're accomplishing this by working in partnership with business and strategically investing some public dollars. Whether it's Dream Home Canada in Shanghai or a strategic marketing initiative with The Times of India Group, we are carving out a presence and gaining new footholds in new markets for British Columbia.
We're opening up new opportunities for forest products, agrifoods, metals and minerals and, in the near future, natural gas. Right now we can only sell natural gas to the U.S., but with the demand and growth across the Pacific Rim, that's a huge incentive for us to move forward aggressively to develop liquefied natural gas, using our twin advantages of a plentiful natural resource and strategic location as Canada's Pacific province, making it possible to ship our product to those more lucrative overseas markets.
That won’t happen overnight, but we have made significant progress in the year since our LNG vision was articulated. Industry has responded with approximately $4 billion in natural gas–related commitments in 2012, including a plan by Shell to build LNG Canada with joint venture partners, a partnership between Spectra Energy and the BG Group; a plan by Petronas, an experienced LNG operator, to establish the Pacific Northwest LNG facility; and Chevron Canada's purchase of an operating interest in the Kitimat LNG plant. In the construction phase alone, these projects represent real jobs for B.C. families, real investments in B.C. worth billions of dollars and, ultimately, real revenue to government for deployment on behalf of British Columbians.
We're also moving forward with our effort to provide more efficient permitting for water, land and mining exploration, so that projects can get off the ground faster while protecting the environment and requirements for First Nations consultations. That work is paying off. For example, mineral exploration spending increased nearly 50 percent in 2012, and we want to keep the momentum going.
We'll also provide nearly $4 million to the Agricultural Land Commission to speed up application reviews, support boundary reviews and work with local governments to encourage farming.
Speaking of farming, agriculture is integral to our quality of life and to the social and economic fabric of B.C. communities. With that in mind, in last year's budget, Budget 2012, we announced one-time support for the province's greenhouse growers. They face a distinct challenge in relation to the carbon tax — the fact that carbon dioxide is essential for plant growth. To help them thrive in a highly competitive market, we introduced a measure to offset their carbon tax costs for one year. Since that time, we have completed a comprehensive review of the tax, and today we are announcing ongoing carbon tax relief for B.C.'s commercial greenhouse vegetable and flower growers.
A new grant will provide relief for 80 percent of their carbon tax costs on certain fuels used for their greenhouse operations. We also intend to provide an exemption for farmers on the carbon tax they pay on coloured motor fuel, matching the current motor fuel tax exemptions, in recognition of the strong importance we all attach to maintaining a strong, competitive domestic agrifood sector.
Our review determined that, in general, the carbon tax at current rates does not appear to have a significant impact on B.C.'s overall economic performance. However, specific sectors involved in things like refining processes and cement production continue to have concerns about their relative competitiveness. We will continue to work with them to find balanced, affordable solutions to their challenges while remaining mindful that, because it is revenue-neutral, the carbon tax helps us to keep other taxes low.
In fact, since its inception in 2008, the carbon tax has raised a total of $3.7 billion, all of which has been reinvested into tax reductions for businesses, individuals and families.
This is an exciting time for British Columbia. We're on the brink of a resource development boom, with the potential to breathe new life into dozens of communities.
Right now across B.C. we have approximately $80 billion worth of major projects underway. These are happening across a whole range of economic sectors from shipbuilding to natural gas, mining to manufacturing, transportation to commercial and residential development.
Decades ago, in far more troubling times, a great statesman said: "Give us the tools, and we shall finish the job." Today the tools we require to support this growth are skills and training.
Accordingly, we are adding significantly to our skills-training infrastructure, helping ensure that British Columbians can be first in line for the jobs of the future. For example, we are investing $29 million for two new trades-training buildings and facility upgrades at Camosun College in Victoria; $28 million to expand and improve trades-training facilities at Okanagan College in Kelowna; $12 million towards a new building for the Chip and Shannon Wilson School of Design at Kwantlen Polytechnic University in Richmond, to introduce new programming in technical apparel design. Another $17 million is targeted to new skills-training equipment at colleges and institutes throughout B.C., and we are putting $6.3 million towards the new North Kamloops Secondary trades and technology centre of excellence.
Along with building our capacity for training, these new capital investments will generate new economic activity in almost every region of the province.
In total, we will be making $10.4 billion worth of taxpayer-supported capital investments over the next three years. That includes continuing investments in more than $3 billion worth of transportation projects with more than $800 million earmarked for public transit, $100 million for the Cariboo connector, $95 million for the Okanagan Valley corridor, $92 million for the roadbuilding portion of the mountain pine beetle strategy, $30 million for the Gateway program to keep our trade with Asia flowing, and $9 million for cycling infrastructure.
In the health care sector we're investing $2.3 billion in capital projects, including the redevelopment of B.C. Children's and Women's Hospital in Vancouver, a new Surrey Memorial Hospital emergency department and critical care tower, a new Interior heart and surgical centre in Kelowna, the replacement and expansion of north Island hospitals, the redevelopment at East Kootenay Hospital in Cranbrook, the replacement of Lakes District Hospital in Burns Lake, the replacement of Queen Charlotte–Haida Gwaii Hospital.
We will invest $1.5 billion in capital projects for the education sector, including new or replacement schools in Langford, Oliver, Chilliwack, Coquitlam, and a seismic upgrade at Wellington Secondary in Nanaimo.
Importantly, even with these new investments, debt will remain affordable. Debt growth will slow as we return to a balanced budget, and the ratio of taxpayer-supported debt to GDP, a key measure of affordability, will peak, as we projected in last year's budget, at 18.3 percent in 2014-2015. Then it will begin to decline. And because our revenues will outpace spending, we will have an opportunity, once we're into those surplus budgets, to do a little more to keep life affordable for B.C. families.
Let's talk about that for a moment, because that's the whole reason that we're so intent on balancing the budget and building the economy. Together they provide the strong foundation families and businesses need to prosper in the years ahead. For example, our prudent fiscal management continues to earn us a rare triple-A credit rating, the highest rating available.
Now look, I realize most people don't sit around the kitchen table and worry about the province's credit rating. They do worry, however, when more and more of their tax dollars are spent on servicing debt. Our hard-earned triple-A credit rating has saved taxpayers millions of dollars in debt-servicing costs, allowing us to put those dollars into vital public services.
With Budget 2012 we introduced three new measures to help keep life affordable for families, the first-time new-home buyers bonus, the seniors home-renovation tax credit and the children's fitness and arts tax credits.
Since Budget 2012 we have also improved income and disability assistance to help vulnerable individuals and families attain better financial outcomes, to help people with disabilities lead more independent lives and to help people capable of work avoid the cycle of income assistance dependence.
We're continuing to work on poverty reduction strategies, beginning with pilots in seven communities recommended by local leaders. We launched a new employment program to help more British Columbians find and keep the jobs they need to support themselves and their families. With today's budget, we are building on that with a number of targeted measures to make life more affordable for families.
First, we'll continue to provide tax credits benefiting seniors and children. We are investing over the next three years approximately $81 million for the seniors home-renovation tax credit and $27 million for the children's fitness and arts tax credits. The first-time new-home buyers bonus, which remains in effect until March 31, is on track to help more than 1,000 individuals and families afford a new home.
With this budget, we're taking further steps to help owners when their costs can be highest, by providing the option of property tax deferral to a wider range of families. Seniors in the province have had this option since 1974. It lets them defer their property taxes until their home is sold, so they can keep a little more of their income every year.
In 2010 we expanded this option to include families supporting children under the age of 18. Today I can confirm that we are also including families supporting their children attending an educational institution and those supporting adult sons and daughters who have disabilities.
We're also making a small but significant change to the legislation governing the property transfer tax, which has affected some families unfairly. That legislation will be amended to clarify its intent so the tax will generally not apply to family farms passed from one generation to the next.
I want to speak for just a moment about the power of savings. Saving is about prioritizing for the future. It's hard to save. I find it hard to save. There always seems to be a more immediate need. It's virtually impossible to save if you're spending more than you make. All of this is true for families, and it's also true for government. But by taking some modest steps today to save and plan for the future, we can have a dramatic positive impact on the most important investment of all — caring for children and improving their future prospects.
In 2007, when admittedly, times were a little better, the government started saving. Since January 1, 2007, we have been investing $1,000 for every child born in the province. Today, for each of those children, that amount has grown to about $1,200. It's time to unleash the full force of that savings potential by forging a partnership with parents and families.
Effective immediately, every family with a child under seven who meets some basic residency rules will qualify for a one-time B.C. training and education savings grant. Once the child turns six and enters an elementary school program, we will transfer $1,200 to the family to help with the costs of studies or skills training after high school.
All you'll need to qualify for the $1,200 grant is to have a registered education savings plan in place before your child's seventh birthday. If you already have one, great. If not, the sooner you set one up, the sooner savings can begin to accumulate. Families won't be required to put in their own contributions to get the B.C. grant, but we certainly encourage them to do so, because RESPs harness the power of interest over time, allowing your investments to grow tax-free until your son or daughter starts a post-secondary program.
The new B.C. training and education savings grant will give your child a boost, and families with a registered savings plan can also qualify for significant additional federal grants.
Even with a modest family contribution of $10 a month, a child who's starting school this September could have over $4,000 in their RESP by the time they graduate from high school — enough to get a good start in any post-secondary program, whether it's vocational skills, college or university. At $50 a month, for families that can do that, the equivalent amount would be $12,000.
We have to stop thinking of education as just K-to-12. By 2020 almost 80 percent of new job openings will demand at least some post-secondary training, and that proportion is growing all the time. We need to accept and plan for that reality. While we do not support the concept of free tuition, we do agree that government has a role alongside families in removing financial impediments to higher education and skills training.
That's why in 2012 we introduced changes to help low-income students and their families. We estimate, presently, the province will pay down just under $1 million in student loan principal for up to 17,000 students by the end of this year and forgo about $4 million in interest payments. In the coming year, some 20,000 students will benefit as we pay down about $2 million in principal and $4.5 million in interest on student loans.
That will make life a little more affordable. Now with the B.C. training and education savings grant, higher education and skills training for the children of today — the students of tomorrow — will be more accessible than ever before.
What about the shorter term? That's a question many parents may be asking. Saving for the future is an excellent idea, but what about the more immediate challenges? With this budget, we're setting out a plan to address those as well.
As our economy picks up steam, as we continue to reap the rewards of prudent fiscal management, we will be able to invest an additional $76 million over three years to improve families' access to quality early learning and child care supports. Of that total, $32 million will support the creation of new child care spaces, $37 million is targeted to improving the quality of child care and early learning services and another $7 million will be invested to improve coordination of early childhood development programs and child care services.
These investments build on the $1 billion a year the province currently spends on early learning, childhood development and child care services and the $129 million invested annually in full-day kindergarten.
In addition, we are investing $146 million in a new provincial tax credit, starting in 2015. The new B.C. early childhood tax benefit will provide up to $660 a year for children in British Columbia under the age of six to help families with the cost of their care. Approximately 180,000 families will be eligible to receive the benefit. Most will receive the full amount, while those with family incomes between $100,000 and $150,000 a year will receive a partial benefit. That will help them pay for child care or any of the other expenses that come with the territory when you're raising a young family.
The third initiative to help keep life affordable for families isn't, strictly speaking, a budget measure, and it doesn't appear in the budget bill. But it is important, because it will help a lot of families save for the future, and saving isn't just for six-year-olds.
Some individuals are fortunate to have good pension plans, but those who are self-employed or work for small businesses don't have access to the same opportunities. In fact, it's estimated that just one of every three B.C. workers belongs to a registered workplace pension plan.
It's difficult to save for retirement on your own, especially when you're raising a family. Too often parents are forced to choose between the needs of today and the needs of tomorrow. We intend to give those families a break. During this session we will introduce measures that will make it easier for working families to save for retirement and provide an additional, optional safety net for those who cannot currently access group pension plans.
We've worked with the federal government, and we'll create a mechanism by which thousands more British Columbians will have the opportunity to pool their retirement savings with a regulated pension program and benefit from economies of scale closer to those sustaining large-scale pension plans. We'll provide the House with details in the coming weeks. It's one more way we're working with the people of B.C. to build a strong, secure future for the province.
I cautioned at the outset that achieving our goal of a balanced budget wouldn't leave a lot of room for massive, widespread spending announcements. As I draw my remarks to a close, members will, I hope, at a minimum, accept the veracity of that statement.
What we've done today is lay out a modest, responsible and achievable plan to guide B.C. through the next two years of continuing global economic uncertainty with a balanced budget, affordable spending and, as the economy strengthens, some new supports to help make life more affordable for families.
It may not be your classic pre-election budget. Would it just be easier to run a deficit? Absolutely. When it comes to exercising spending discipline, as most parents can attest, it's not saying yes that's difficult. It's saying no. It's always possible to put off those difficult decisions. It's always possible to say: "Oh well, we'll balance the budget next year or tomorrow." The problem is that too often for too many governments, tomorrow never comes.
Ever since this government first came to office, we've focused on delivering sound fiscal management. In 2002 when we tabled our first full budget, we were facing a structural deficit of over $4 billion. We worked hard to turn that around, and we succeeded. By 2005 the budget was balanced, and we kept it balanced. In fact, we recorded record surpluses until we were hit by the impact of what's now being called the Great Recession.
We went into deficit in 2009 because, given what was happening around us in the world, it was better than the alternatives. Instead of making massive program cuts or implementing big tax hikes, we spent some money to help people through the worst of the recession. That was the right choice. It wasn't a happy choice, but it was the right choice.
We knew it wouldn't be easy to get back to surplus budgets, but we committed then, just as we did with our first full budget in 2002, to do the necessary work to get our financial house in order. And just as we did in 2005, we stand today on the brink of delivering a series of back-to-back surplus budgets. That will give our province an edge — an edge in attracting new investment in a still uncertain global economy.
We can look forward to a future of growth, opportunity and prosperity. It will be a future where parents have more support to care for their children; where the education system is able to prepare them for the jobs and the challenges that lie ahead for all of us; where every child will have the opportunity to graduate from high school with money in the bank for further education or skills training; and as the economy continues growing stronger, a future where our young people have more options and more opportunities than ever before to build their lives and careers and families right here in B.C.
That's the future we're working towards, and that future now includes balanced budgets. Starting today, as British Columbians travel to other parts of Canada, they will be able to say with pride: "I come from B.C., where the government doesn't spend more money than I send it, where the government doesn't burden future generations with the costs of programs being delivered today."
I think I've sat here for at least 19 budgets over the years, and I've heard them characterized in a variety of ways: prudent or reckless, frugal or extravagant. In presenting this one to the House for its consideration, I observe, with a modest measure of pride, that it is, in every sense of the word, balanced.
B. Ralston: Today's budget comes at a critical time for British Columbians. International, economic and demographic indicators tell us that we face challenging times ahead. It's time for government to offer realistic analysis and practical solutions. Unfortunately, that is not what we see in Budget 2013.
Today we have a budget that reflects the priorities of a government heading into an election instead of meeting the needs of British Columbians. Whether it is claiming revenue that we will never see or underestimating expenditures, this budget is just one more addition to this government's credibility gap. While real British Columbians struggle to find skills training, get a job or take care of loved ones, today's budget offers little right now when it is needed.
We have seen this before. The 2009 pre-election budget also committed to numbers that had little to do with reality, and the most significant piece, the harmonized sales tax, was not even mentioned. In the last pre-election budget, the 2009 budget, the Finance Minister predicted a deficit of $495 million and a return to a balanced budget by 2012. We know, in fact, that the 2009 deficit was four times that at almost $2 million, and we have continued to see deficits ever since. The projected deficit for the 2013 year, ending March 31, next month, is $1.2 billion.
This year the government unrealistically claims that the budget they have just presented to the House will generate a surplus. Once again, we see unrealistic plans to sell off valuable land and assets. The government is booking $475 million in sales for the coming year — this despite the fact that selling a major property can be a complicated and lengthy process and many properties will require the government to consult with First Nations about each property intended for sale.
Respected former TD Bank chief economist Don Drummond, in a report for the Ontario government, addressed the issue of asset sales. Mr. Drummond advised: "In budget planning, do not count chickens before they are hatched. If assets are to be sold, never incorporate any revenue from such planned sales into a budget before the fact."
Yet again, the government intends to collect a dividend on dubious B.C. Hydro profits. As the Auditor General says, the massive debt facing Hydro as the result of deferral accounts makes this questionable. He says that the practice of deferring expenses into the future, defended by the B.C. Liberals, "creates the appearance of profitability where none actually exists."
Further, given the fantasy future conjured up in last week's throne speech, it is worth noting that at the front of the budget document the Deputy Minister of Finance cautions that "the fiscal plan assumes no explicit economic activity or incremental resource revenue from liquefied natural gas development in the province."
The budget identifies close to $1.1 billion in savings over three years. There is little evidence to suggest that this is a realistic estimate. The B.C. Liberals seem to be underestimating health care expenditures as well. This year the government is posting the lowest rate of annual health spending increases in the last ten years. Last year's health budget projected that health expenditures would increase by $605 million for 2013-14, but the documents project $370 million, $235 million less. While some savings may well be achievable, this magnitude of savings is optimistic, to say the least.
Investment in justice is being reduced at a time when we know our legal system and court services are facing incredible pressures. At a time when the province is facing a forestry crisis, instead of investing in our land base, this Liberal government is cutting the budget for forest health. While this government claims they're investing in future mining and natural gas development, funding for the ministries that support these areas is being reduced. We also see no credible plan or funding to address timely permitting for the resource sector and to avoid a repeat of the backlog mess created by the Liberals.
The education learning improvement fund, created in response to past unconstitutional laws passed by the B.C. Liberal majority here in the Legislature, is inadequate to meet the challenges facing students in our classrooms. We know that 80 percent of the jobs of the future will require some form of post-secondary education or training. Despite this, the B.C. Liberals' 2013 budget cuts post-secondary education yet again. This budget predicts a reduction in the number of student spaces in colleges and universities, less money for student assistance and less support for advanced education. And we see no new investment in apprenticeship and industry training.
There's also little to address student debt — this in a province where students graduate with an average of $27,000 in debt, the highest debt load west of the Maritimes. There's also nothing new in the budget to support our creative and innovative sectors such as film, television, digital media, life sciences and high-tech.
We are disappointed to see that there's nothing in this budget that will address climate change. The fact that the carbon tax revenues will continue to be recycled through tax reductions and not used to fund any emission reduction is a lost opportunity.
This budget comes after months of taxpayer-funded partisan ads that attempt to assure British Columbians that all is well. We know that those ads, part of a so-called facts campaign, are designed to help decrease the government's self-admitted credibility gap — millions of dollars wasted. Today's budget will only increase that credibility gap.
New Democrats believe that British Columbia has a bright future, and we have not given up on that future. We want to build upon our incredible diversity — cultural, entrepreneurial and geographic. We treasure our natural environment, which does not have to be sacrificed in order to build a strong economy. We will support British Columbians who need the opportunities to get the skills to participate in our economy.
Today's budget has made it clear that it's time for a change. I'll have more to say about the budget tomorrow. In the meantime, I move adjournment of the debate.
B. Ralston moved adjournment of debate.
First Reading of Bills
Bill 9 — Budget Measures
Implementation Act, 2013
Hon. M. de Jong presented a message from Her Honour the Lieutenant-Governor: a bill intituled Budget Measures Implementation Act, 2013.
Hon. M. de Jong: Mr. Speaker, I move first reading of Bill 9, the Budget Measures Implementation Act, 2013.
Mr. Speaker: Continue, Minister.
Hon. M. de Jong: Bill 9 amends seven statutes to implement many of the legislative amendments necessary to give effect to Budget 2013.
The Income Tax Act is amended to increase the general corporate income tax rate to 11 percent, effective April 1, 2013, and to establish a new temporary top personal income tax bracket with a rate of 16.8 percent for income over $150,000. The new personal income tax rate and bracket are effective January 1, 2014, and will apply for the 2014 and 2015 tax years only.
The Tobacco Tax Act is amended to increase the tax rate by $2 per carton of 200 cigarettes and translates into one cent per gram of fine-cut tobacco, effective October 1, 2013.
The Land Tax Deferment Act is amended on the later of March 19, 2013, and royal assent to expand the property tax deferment program for families with children. The expansion will allow eligible homeowners who financially support a dependent child of any age to defer their property taxes if the child is either enrolled in an education institution or is disabled.
The Land Tax Deferment Act is also amended to allow certain partial disposals of property without triggering the end of the tax deferment agreement and, therefore, the requirement to repay previously deferred taxes. This amendment is effective on royal assent.
The Home Owner Grant Act is amended to ensure that homeowners who are issued a notice of disentitlement on or after January 1, 2011, may receive the benefit of the grant despite having claimed it on the wrong property.
The Property Transfer Tax Act is amended to expand the exemption for transfers of family farms on the death of the owner, to ensure transfers to family members are exempt, as intended.
The Hydro and Power Authority Act is amended to authorize B.C. Hydro to pay grants in lieu of property tax to taxing treaty First Nations that host B.C. Hydro facilities. B.C. Hydro currently pays grants to local governments and makes payments to non-treaty First Nations but does not pay grants to taxing treaty First Nations.
Finally, Bill 9 amends the Forest Act to enhance the act's revenue audit compliance provisions.
I move that Bill 9 be placed on orders of the day for second reading at the next sitting of the House after today.
Bill 9, Budget Measures Implementation Act, 2013, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
Hon. M. de Jong: I have the pleasure to rise to table the Budget and Fiscal Plan 2013/14–2015/16, which fulfils the requirements of section 7 of the Budget Transparency and Accountability Act. I also table, on behalf of the ministers responsible, the government's overall strategic plan and service plans, as required under the Budget Transparency and Accountability Act.
The service plan documents are presented in two binders. The first binder contains service plans for the Office of the Premier and 16 ministries. The second binder contains service plans for 30 Crown corporations. The second binder includes a list of organizations that are exempted from the service plan requirements under section 13 of the Budget Transparency and Accountability Act.
Hon. M. de Jong moved adjournment of the House.
Mr. Speaker: This House stands adjourned until 1:30 tomorrow afternoon.
The House adjourned at 3:25 p.m.
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